Ch.7: Consumer Decision Making and Behavior

(5) Post-Purchase Cognitive Dissonance

"Doubt or Anxiety about the correctness of one's decision after a purchase has been made" - usually occurs w/ higher risk decisions uncomfortable mental state following purchase that causes the customer to doubt the wisdom of their purchase decison Uncomfortable mental state following purchase that causes the consumer to doubt the wisdom of their purchase decision. Also called Buyer's Remorse.

Purchase Situation Factors

- Economic factors - time constraints - purchase reason or task - purchasing environment

Decisions routinely made by customers

- Product choices: what or what not to buy - Brand choices: what to buy - Dealer/store/website choice: where to buy - Purchase timing: when to buy - Purchase amount: how much to buy

(5) Probability and Magnitude of Dissonance Depends on:

- commitment - can it be revoked - importance of decision - difficulty choosing among alternatives - bc even after choosing, may start to believe that other choice was better - tendency to experience anxiety

Sociocultural/Environmental Factors

- culture and subculture - social class, income, education - family - reference groups

Marketing Tactics to Encourage Attention

- fear - humor, entertainment - sex-appeal - physical stimuli to stand out

Operant/Instrumental Conditioning: Induce Trial

- for operant condition works, consumers need to try the product and when they get a positive response from it, the more they want to use it Trial Precedes Liking: - Reverse is often true for classical conditioning - Product sampling is an example of this type of learning

types of risk that affect the level of consumer involvement

- functional/performance - physical - social - psychological - financial - time

5. Post purchase process

- how one feels after a purchase - if a consumer is satisfied or not, if they will repurchase or not, etc.

Sex appeals

- interactive - implied - offensive, too violent? - subliminal - fast food - toilet paper Grabs attention: • Can be successful at attracting and holding consumer attention Responses can be negative: • Highly explicit ads can be negative (i.e. selective distortion occurs) • Harm Recall • Can be harmful to Brand and Company Image Appropriate for Target Market: • Use of sex appeals should be appropriate for the product, target market

Psychological/Individual Factors

- needs and motives - perception - learning - attitudes - personality, self control, & lifestyle

(5) Consumers will try to reduce their dissonance by self-justification and/or reversing the action:

- reverse the decision (return the product) - decrease the importance of purchase decision - increase the desirability of the brand - decrease the desirability of other brands

(1) Type of consumer Problems

- routine problems - planning problems - emergency problems - evolving problems

Humor appeals

- surprise - silliness - personification - comparison - puns, word play - reverse stereotyping - exaggeration - sarcasm, irony Like the ad, like the product ◦ A 'rub-off' from the ad to the brand ◦ Affect referral (iconic rote learning) ◦ Classical Conditioning (a learning theory discussed later in this lecture) (ppl need to remember the product/brand) Diffuses viewers' tendencies to 'counter argue' May reduce number of required exposures linking brand name to benefits

(3) Type of evaluation criteria

- utilitarian, tangible attribute - hedonic, intangible attributes - number of evaluate criteria can depend on if high/low involvement - importance can also depend

Consumer Decision Making Process

1) Problem Recognition: realizing that a purchasing need (problem) exists 2) Information Research: seeking relevant info about products that potentially may satisfy or solve this need (problem) 3) Alternative evaluation: assessing different product solutions to determine which one appears more likely to satisfy or solve the aroused need (unresolved problem) 4) Choice: subsequent purchase of one or more products based on the prior evaluation process 5) Post-purchase processes: the cognitive and behavioral responses initiated by consumers as their expectations about the value delivered by the product they selected are exceeded

Factors of Consumer Decision Making Process

1) Psychological factors: - needs and motives - perception - learning - attitudes - personality, self control, & lifestyle 2) Sociocultural Factors: - culture and subculture - social class, income, education - family - reference groups 3) Purchase Situation Factors: - Economic factors - time constraints - purchase reason or task - purchasing environment 4) Marketing Activities: - product/service - promotion - pricing - distribution

When studying customers firms should answer the following

1) What consumers buy 3) where consumers buy 3) how and how much consumers buy 4) when and why consumers buy

Operant/Instrumental Conditioning Example

A mouse is presented with two stimulus lights. Reinforcement: The mouse initially learns to push a lever when one of the lights is lit to get food. Punishment: The mouse also learns to avoid the lever when the light that produces a shock is lit.

Classical Conditioning

A type of learning in which one learns to link two or more stimuli and anticipate events Ex: Pavlov's dogs, Watson;s little Albert, Marlboro and cowboy, alcohol ads

(3) Information Search: Awareness of Alternatives

All of the brands you listed that you are aware of and any of the brands you forgot make up the UNIVERSAL set. Now underline those that you would actually consider purchasing (Evoked Set) Cross out any products you would avoid/not purchase (Inept Set) Anything left over is part of your Inert Set (you are indifferent towards it)

Culture

Beliefs, customs, and traditions of a specific group of people, leads to common behavioral patterns

The behaviorist

Changes in an individual's responses occur because of exposure to stimuli Behavioural learning theories assume that learning takes place as the result of responses to external events - classical conditioning - operant/instrumental conditioning

Fear Appeals Work Best when...

Consumers recognize severity of threat Consumers recognize they can be affected by the threat ◦ Credibility of the source ◦ Believable, trustworthy, expert ◦ Perceptual Defense limited Ad shows how to deal with the problem ◦ Directs viewer to the desired behavior ◦ Usually to advertiser's brand Proposed course of action is easily implemented

routine purchase decisions

Decisions for which consumers expend little effort or time acquiring info and comparing alternatives

1. Problem Recognition

Desired State - what consumers would like Actual state - what consumer perceives as already existing when desired state = actual state, then no problem exists problem exists when there is a DISPARITY bw the 2 - depends on 2 factors: perceived distance and perceived relative

(4) In store influences that impact purchase

Displays, Price reductions, Store Layout, Stockouts, Sales Personnel -----> Alternative Evaluation----> Modifying intending purchase behavior

dissociative reference groups

Groups that are viewed negatively and with which consumers do not wish to be identified

Cautions When Employing Humor

Humors must link directly back to the brand: • Draw attention to the brand • Facilitate brand name retention, recall • All other uses are just distractions Research your target audience: • Avoid insulting, offensive delivery • Selective distortion is always a risk: -• Tendency for people to interpret information in a way that will support what they already believe

(1) Search Decision Initiated

If the discrepancy is sufficiently large and important, the consumer will start the process to find the product that will deliver the benefits to fill the need or solve the problem - this stage may or may not occur depending on risk and involvement

(1) Perceived Relative

Importance of the Problem (compared benefits vs. costs of solving problem)

How consumer learning affects decision making and behavior

Learning refers to any change in the content or organization of long-term memory. Consumer behavior is largely learned behavior. We learn through: ◦ Education ◦ Experience

Vicarious Learning: Implications for marketers

Marketers use vicarious learning in advertising by 'allowing' consumers to view the results of others who use a product and receive rewards for using it. The potential consumer can imagine similar results if he or she uses the product. For example: - gambling - deoderant - toothpaste - dating website - perfume - athletic wear

Operant/Instrumental Conditioning

Occurs as the individual learns to perform behaviours that produce positive outcomes and to avoid those that yield negative outcomes. - actually use the product - Ex: rewarding with chocolate

4. Store choice and purchase

Once the alternatives have been evaluated, the consumer is ready to make a purchase decision. Sometimes purchase intention does not result in an actual purchase. The marketing organisation must facilitate the consumer to act on their purchase intention.

Houosehold

One or more people who live in the same dwelling sharing meals or living accommodation, and may consist of a single family or some other grouping of people.

Which of the following least characterizes the routine purchasing decision?

Post-purchase cognitive dissonance is more likely to occur

Which of the following most characterizes the extensive purchasing decision?

Post-purchase cognitive dissonance is more likely to occur

Classical Conditioning in a nutshell.....

Primary Stimulus causes a natural response - primary stimulus + secondary neutral stimulus = natural response of primary stimulus - secondary neutral stimulus by iteself -> generalizing -> natural response of primary stimulus becomes natural response of secondary stimulus

Vicarious (Observational) Learning

Process through which people observe and then imitate the behaviour of others. To be effective, the consumer should have the ability to perform the behaviour, and it should appear useful to the consumer Ex: Boho Doll experiment

Vicarious Learning/Modelling

Requires 4 conditions: - attention - retention - reproduction - motivation

Fear Appeals

Scare us into Buying: - "Halitosis" - Bad Breath - safety - fear of missing out De-market Harmful Products: - smoking cigarettes - drinking alcohol

family unit

The basic social unit consisting of parents and their children, considered as a group, whether dwelling together or not.

Cognitions

The beliefs or knowledge component of attitudes

3. Evaluation and selection

The process by which consumers compare and contrast different solutions to the same marketplace problem May exist in terms of extremes, limits, or ranges Can be affected by: - Characteristics of the individual - The purchase situation Can differ in type, number, and importance...

(2) sources of information

The search for solutions typically begins with a memory scan (internal search). Brands that are recalled first are generally more frequently purchased, underscoring the power of promotional strategies designed to create top of mind awareness (TOMA) via repeat advertising. - Memories (internal) - personal sources - independent sources - marketing sources - experimental sources

self concept

The totality of the individual's thoughts and feelings about the self.

2. Information search

This stage may or may not occur. But with high-involvement decisions it almost certainly will. The importance of sources usually varies substantially, depending on individual consumer characteristics or characteristics associated with the problem itself.

Fear Appeals are Less Effective when

Too threatening: ◦ Message is ignored or dismissed ◦ Perceptual Defense is operative Little or no anxiety is associated w/ the message: ◦ Insufficient evaluation of harmful effects ◦ Little cognitive elaboration of effects on consumer ◦ Message nearly entirely screened out... Perceptual defense: dismissing info that causes conflict

Watson's Little Albert

US: loud noise UR: fear CS: white rat CR: fear

The cognitivists

Views learning as problem solving and focuses on changes in the consumer's psychological set - Iconic Rote Learning - Vicarious Learning/Modeling - Reasoning

Self-concept

When consumers perceive a match between the brand image and their own ideal self-concept, then positive attitudes are formed, which leads to satisfaction and repeat purchasing Incongruent: - the self image is different to the ideal self - there is only a little overlap - here self-actualization will be difficult Congruent: - the self-image is similar to the ideal self - there is a more overlap - this person can self-actualize

reference group

a group that provides a standard for judging one's attitudes or behaviors A group of two or more individuals whose beliefs, attitudes, values, norms of behavior, or symbols are used by another person or persons as guides to behavior.

Consumer Learning through Classical Conditioning

an effective ad may link a product to stimulus that evokes a positive feeling

Learning

any changes in beliefs, attitudes, and behavior resulting from personal experience, mental interpretations, or representations of these experiences, or through observing the experiences of other individuals, have high and low involvement learning - The behaviorists - The cognitivists Low involvement learning: Classical conditioning and iconic rote learning

AIO

attitudes, interests, and opinions; used to group consumers in to categories

operant conditioning (instrumental learning)

behavior is the result of learned responses from the past actions and the valance and magnitude of the rewards associated w/ those actions

(2) top-of-mind brand awareness (TOMA)

brands that are recalled first and generally are more frequently purchased

Consumer Behavior (CB)

buying behavior of final consumers

attitudes

capture consumers' enduring, consistent, deeply-held evaluations, FEELINGS, and behavioral tendencies held toward things, AFFECT - consumer's beliefs about product characteristics influence their ___ toward those products

Pavlov's dogs

classical conditioning, dogs taught to salivate in response to a sound

brand loyalty

consistent preference for one brand over all others

Self-concept

constructs how consumers feel and see themselves Actual self: - private - how I actually see myself - Social - How others actually see me Ideal self: - private - How I would like to see myself - social - How I would like others to see me

Needs & Motives

consumers are motivated or driven to engage in decision making process

selective interpretation

consumers construe info in ways to allow it to fit w/ existing beliefs and attitudes, consumers misperceive or misunderstand a large proportion of info to which they are exposed

extensive problem-solving

decisions for which customers are highly involved and actively access and process substantial info on products, brands, and purchasing location prior to making a choice

beliefs

descriptive thoughts that consumers have about something - cognition, knowledge

variety seeking

desire to try something new

Values

enduring belief that is shared by members of a society that a specific behavior is personally or socially preferred over another - these groups may respond similarly to a given market strategy

Social Classes

exist in virtually all societies and are strongly correlated w/ many consumption patterns and behaviors

Iconic Rote Learning (Passive Learning)

explains how most consumer learning occurs for low involvement products, involves learning the association bw 2 or more concepts in the absence of conditioning by using message repetition Association between two or more concepts in the absence of conditioning ◦ Low-Involvement Learning ◦ Learn link between brand name and key benefits Memorable image associated with brand name and attributes Ex: pepto bismol, bounty quicker picker upper - shows a solution to the problem

needs

fundamental forces that cause people to act

aspirational reference groups

groups in which a person is not currently a member but aspires to be one Groups that consumers aspire to be identified or associated with such as celebrity athletes, actors, or musicians

membership groups

groups with direct influence and to which a person belongs

ideal social self

how consumers would like others to see them

ideal private self

how consumers would prefer to see themselves

primary membership groups

include family, friends, and colleagues - exercise the most influence on others members' value systems and consumer behaviors A reference group to which an individual belongs and interacts with frequently and that has significant enduring effects on that individual's beliefs, attitudes, preferences, and behaviors. Usually consists of family, friends, and colleagues.

Lifestyle

includes: - activities - interests - opinions

final consumers

individuals who acquire products or services for their personal consumption or their family's consumption

convenience goods

inexpensive items that consumers purchase regularly without much thought

Cognitive Learning

learning through education, reasoning, people telling us things, watching and observing, looking at internal processes Views learning as problem-solving process rather than the development of connections between stimuli and responses. Stresses the importance of internal mental processes (what is going on in the black box) Focus on the processes responsible for how people form associations among concepts, learn sequences, solve problems and have insights (how we gain knowledge).

cognitive decision algebra

logical set of rules employed by customers engaged in decision making

(2) level of consumer involvement

low involvement - habitual/routine decision making limited decision making high involvement - extensive decision making

(1) Perceived Distance

magnitude of the discrepancy bw desired and actual state

Reasoning

most complex form of learning, basis by which we gather and evaluate info that is employed in making extended or complex decisions, is a high-involvement problem solving process - occurs when new info is collected and combined w/ info already in memory for purposes of problem solving Also called cognitive learning. Learning through insight rather than from the pairing stimulus and response. Learning as the result of actively integrating information to achieve a behavioral objective.

inertia

not actually loyal to the brand but buy it bc it works but if anything changes customers would immediately switch

selective exposure

occurs when consumers are exposed to some forms of info but not others - Consumers actively choose (consciously) whether or not to expose themselves to information. - Ex: Shopping aisle avoidance, ad avoidance - Marketing Response: making aisle into a maze, make ads more interesting by using product placement (ads in movies)

selective attention

occurs when consumers, once exposed to info, pay attention to only part of that info

selective retention

only a portion of info that makes it through the other perceptual filters is retained in the memory

What type of "risk" is implied when parents express a concern that toys and other products purchased for use by their children may not be safe or healthy?

physical risk

Perception

process by which consumers select, organize, and interpret information perceptual filters: - selective exposure - selective attention - selective interpretation - selective rention

secondary membership groups

professional associations, churches and local organizations - ties w/ this group are weaker and less frequent

Wants

results from needs, can be viewed as specific satisfiers of the underlying need

When consumers choose to watch specific television shows or read their favorite magazines, they are exhibiting:

selective exposure

Subcultures

smaller subsets or groups that exist w/in broader cultures

behavior

tendencies

Interpretation

the assignment of meaning to sensations - The process through which people draw upon their experience, memory, and expectations to attach meaning to a stimulus

(1) active problem recognition

to make consumers aware of the problem influence the perceived existing state <---(Influence the perceived importance of existing discrepancy)--->

marketing mix

what marketers have control over and is what helps influence consumer decision making

Vicarious learning

when consumers observe the results of other ppl's decisions/behaviors/consequences and adjust their assumption behaviors based on the desirable or undesirable outcomes that were observed